November 30, 2025 a 12:46 pm
WEC: Dividend Analysis - WEC Energy Group, Inc.
WEC Energy Group, Inc. represents a reliable investment opportunity with a solid dividend history. The company exhibits moderate growth in dividends, ensuring consistent returns for long-term investors. However, the payout ratios suggest cautious monitoring of free cash flow stability. Understanding these metrics is critical for a balanced investment strategy.
📊 Overview
WEC Energy Group operates in a stable sector ensuring dependable earnings. The company's current dividend yield stands at 3.22%, demonstrating strong shareholder returns. With a long-standing dividend history of 40 years, investors enjoy reliable income, albeit with the last cut occurring in 2001, which indicates stable dividend practices.
| Key Metrics | Values |
|---|---|
| Sector | Utilities |
| Dividend Yield | 3.22% |
| Current Dividend per Share | 3.34 USD |
| Dividend History | 40 years |
| Last Cut or Suspension | 2001 |
📉 Dividend History
The consistent payment of dividends over the past 40 years reflects WEC's commitment to rewarding shareholders. The historical changes in dividends highlight effective management and strategic growth, essential for long-term investments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 3.57 |
| 2024 | 3.34 |
| 2023 | 3.12 |
| 2022 | 2.91 |
| 2021 | 2.71 |
📈 Dividend Growth
The dividend growth rates over 3 and 5 years demonstrate a sustainable increase, critical for compounding investments. Investors riding on such growth benefits from increasing yield on their initial investment.
| Time | Growth |
|---|---|
| 3 years | 7.22% |
| 5 years | 7.19% |
The average dividend growth is 7.19% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios are essential for assessing dividend sustainability. A high EPS-based payout ratio might indicate riskier dividend continuation if earnings decline. Conversely, a negative free cash flow ratio signals potential liquidity challenges.
| Key Figure | Ratio |
|---|---|
| EPS-based | 63.74% |
| Free cash flow-based | -263.82% |
The EPS payout ratio is relatively balanced at 63.74%, indicating a manageable dividend in relation to earnings. However, the FCF payout paints a negative picture, suggesting caution.
📊 Cashflow & Capital Efficiency
Critical to assessing a company's financial robustness are its cashflow metrics and how efficiently it utilizes capital. Here’s how WEC Energy Group fares over the past few years:
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 1.45% | 1.98% | -0.86% |
| Earnings Yield | 5.14% | 5.02% | 4.77% |
| CAPEX to Operating Cash Flow | 0.87 | 0.83 | 1.12 |
| Stock-based Compensation to Revenue | 0% | 0% | 0% |
| Free Cash Flow / Operating Cash Flow Ratio | 13.41% | 17.41% | -12.34% |
WEC's cash flow metrics highlight a strong earnings yield, though free cash flow yield suggests tighter cash conditions recently. Thus, while capital is efficiently allocated, liquidity management needs reinforcement.
📊 Balance Sheet & Leverage Analysis
A thorough understanding of leverage and balance sheet strength provides insights into financial stability and risk:
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.64 | 1.60 | 1.52 |
| Debt-to-Assets | 0.43 | 0.43 | 0.41 |
| Debt-to-Capital | 0.62 | 0.62 | 0.60 |
| Net Debt to EBITDA | 5.19 | 5.32 | 5.14 |
| Current Ratio | 0.45 | 0.55 | 0.69 |
| Quick Ratio | 0.43 | 0.40 | 0.52 |
| Financial Leverage | 3.81 | 3.74 | 3.67 |
WEC's financial data reveals elevated leverage which merits consideration in context of its stable but modest liquidity ratios, indicating average financial flexibility and warranting prudent debt management.
📊 Fundamental Strength & Profitability
Profitability and efficiency ratios are central to evaluating the firm’s operational excellence, crucial for investor confidence:
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 12.3% | 11.3% | 12.4% |
| Return on Assets | 3.23% | 3.03% | 3.37% |
| Margins: Net | 17.77% | 14.99% | 14.68% |
| Margins: EBIT | 29.79% | 25.45% | 23.42% |
| Margins: EBITDA | 45.54% | 39.67% | 35.12% |
| Margins: Gross | 44.02% | 40.50% | 34.39% |
| Research & Development to Revenue | 0% | 0% | 0% |
WEC’s profitability ratios are robust, particularly the return on equity, underscoring effective capital utilization. Nevertheless, the absence of R&D investment could hint at limited innovation or sector-specific constraints.
📈 Price Development
🗣️ Dividend Scoring System
| Category | Score | |
|---|---|---|
| Dividend Yield | 4 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 2 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 2 | |
| Balance Sheet Quality | 3 |
Total Score: 27/40
✅ Rating
Overall, WEC Energy Group, Inc. presents itself as a stable investment for those seeking constant dividend income, backed by a long-standing payout history. Despite certain risks with free cash flow, it maintains good financial health and commitment to rewarding shareholders. This stock is suitable for conservative, income-focused investors.